Daimler: austerity course due to strong slump in sales

The German carmaker Daimler wants to save. So far, 10,000 jobs should be cut – there could be more. The reason for the savings course is a drastic slump in sales in the first half of the year – due to the Corona crisis.

Daimler boss Ola Källenius has announced higher cost reductions in view of the slump in business in the corona crisis. The previous efficiency targets would only have covered the transition to electric cars, but not a global recession. “That is why we are sharpening our course,” said Källenius on Wednesday at the start of the virtual general meeting.

The board of directors has adopted a program to improve the cost structure, which encompasses all areas of the company, added supervisory board chief Manfred Bischoff. No new figures were given in the communication.

In November, the new Daimler boss presented plans to save more than one and a half billion euros from 2020 to 2022. Personnel costs should decrease by more than 10,000 of the 300,000 jobs worldwide by 1.4 billion euros.

Daimler sold significantly fewer cars than usual in the first half of the year

Since then, the Covid 19 pandemic has dramatically worsened the situation in the auto industry. According to forecasts by the German Association of the Automotive Industry (VDA), worldwide car sales will plummet this year by 17 percent to just under 66 million.

Daimler sold almost 870,000 Mercedes-Benz cars in the first half of 2020, almost 19 percent less than in the same period last year. In the second quarter, however, some ground had already been made up, said CEO Källenius. According to Källenius, deliveries to end customers in June were again slightly above the previous year’s level.

Things are going up in China

In the most important single market, China, Mercedes-Benz had the best second quarter so far. “We are cautiously optimistic that other markets will follow this development step by step,” said Källenius.

In China, the corona pandemic had first paralyzed economic activity before spreading to Europe and North America. Beijing was the first to start the economy again, and it started later in Europe and North America. “Almost all of our dealers worldwide have reopened,” said Källenius.

In the truck business, which is also very important to Daimler and is sensitive to the economy, the Group had to put up a much more severe damper in the first half of the year than with cars. With around 150,000 trucks, Daimler sold 38 percent less than a year earlier.

In addition to Covid-19, this is also due to an already weaker market environment, especially in Europe and North America. “The development of incoming orders has been positive in almost all of our core markets in recent weeks,” said Källenius.

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